4 Planning Goal Setting

• Goal


  Desired future circumstance or condition that the organization attempts to realize
• Plan


  Blueprint for goal achievement and specifies the necessary resource allocations, schedules, tasks, and other actions
• Planning


  Determining the organization's goals and defining the means for achieving them
• Goal + Plan


  Planning
• Three Levels of Planning

  • Strategic
  • Tactical
  • Operational
• Strategic goals


  Official goals; broad statements describing where the organization wants to be in the future
• Strategic plans


  Define the action steps by which the company intends to attain strategic goals
• Tactical goals


  The results that major divisions and departments within the organization intend to achieve
• Tactical plans


  Define what major departments and organizational subunits will do to implement the organization's strategic plan
• Operational goals


  Specific results expected from departments, work groups, and individuals
• Operational plans


  Developed at the lower levels (frontline/first line managers and supervisors) of the organization to specify action plans toward achieving operational goals and to support tactical plans
• Single-use plans


  Plans developed to achieve objectives that are not likely to be repeated in the future (unique)
• Standing plans


  Ongoing plans that provide guidance for tasks or situations that occur repeatedly within the organization
• Major Types of Single-Use and Standing Plans

  • Programs
  • Projects
  • Budget
  • Organizational policies
  • Rules
  • Procedures
• Benefits of Planning


  • Goals and plans provide a source of motivation and commitment
  • Goals and plans guide resource allocation
  • Goals and plans guide managers to undertake other basic managerial activities
  • Goals and plans are a guide to action
  • Goals and plans set a standard of performance
  • Goals and plans help anticipate problems and cope with change
• Limitations of Planning


  • Goals and plans can create too much pressure
  • Goals and plans can create a false sense of certainty
  • Goals and plans may cause rigidity in a turbulent environment
  • Goals and plans can get in the way of intuition and creativity
  • Planning prevents action
• Strategic blunders can hurt a company
• Strategic management


  Set of decisions and actions used to formulate and execute strategies that will provide a competitively superior fit between the organization and its environment so as to achieve organizational goals
• Explicit strategy


  Plan of action that describes resource allocation and activities for dealing with the environment, achieving a competitive advantage, and attaining the organization's goals
• Competitive advantage


  What sets the organization apart from others and provides it with a distinctive edge for meeting customer or client needs in the marketplace
• Levels of Strategy


  • Corporate-level strategy
  • Business-level strategy
  • Functional-level strategy
• SWOT analysis


  Audit of internal and external factors
• Diversification


  Strategy of moving into new lines of business
• Related diversification


  Expansion into new business related to existing business activities/industry
• Unrelated diversification


  Expansion into new lines of business that are not related to current industry
• Vertical integration


  Expansion into businesses that supply to the business or are distributors (backward and forward)
• Differentiation strategy


  Distinguish products and services
• Cost leadership strategy


  Aggressively seek efficient facilities, cost reductions, and cost controls
• Focus strategy


  Concentration on a specific region or buyer group (segmentation)
• Characteristics of Porter's Competitive Strategies

  • Either differentiation or cost leadership approach
• Factors That Contribute to the Failure of Strategy Execution

  • Embeddedness: deep understanding and acceptance of organizational direction and purpose throughout the organization
  • Alignment requires all aspects of the organization to focus on strategic goals
• Tools for Putting Strategy into Action

  • Visible leadership
  • Clear roles and accountability
  • Candid communication with shareholders, customers, and other stakeholders
  • Appropriate HR practices
• Feedforward control


  Mechanism in a system for preventing problems before they occur by monitoring performance inputs
• Concurrent control


  The process of monitoring and adjusting ongoing activities and processes (during a process)
• Feedback control


  Compare the realized and planned performance - test the success of the organization against the strategic goals and objectives established in the plans